EUR/USD remains within a predominantly bearish daily structure.
Following the strong decline from the April highs, the pair is currently consolidating and developing a corrective structure between approximately 1.1360 and 1.1490.
At the current price of around 1.1410, however, I am not interested in looking for immediate short positions. EUR/USD is still trading inside a relevant demand zone between 1.1360 and 1.1425, making the risk-to-reward profile of selling at current levels relatively unattractive.
In my view, the recovery from the June lows still represents a correction against the broader bearish trend rather than the beginning of a confirmed bullish reversal.
For this reason, I am considering the possibility of one final move higher before bearish momentum returns.
Technical structure
The first upside objective is located at 1.1482, where liquidity is resting above the recent short-term highs.
If buyers manage to extend the recovery, the most relevant area is between 1.1540 and 1.1555. This zone combines the upper boundary of the corrective bullish structure with the main descending trendline.
This is where I would start looking for bearish confirmation on the H1 or H4 timeframe. I have no interest in anticipating an entry without first seeing a clear reaction and a shift in the lower-timeframe structure.
Retail sentiment
Retail sentiment currently shows that 63% of traders are long EUR/USD, while only 37% are positioned short.
The average entry price of long positions is approximately 1.1533, meaning that a significant proportion of retail buyers are currently holding losing positions.
COT positioning
The COT report dated July 14 shows the following non-commercial positioning on the euro:
• Long positions: 230,307
• Short positions: 242,912
• Net position: –12,605 contracts
Speculative positioning therefore remains slightly bearish on the euro.
This suggests that institutional sentiment towards the euro has marginally improved. It could help support a short-term corrective rally, but it is not yet strong enough to confirm a broader bullish reversal.
On the US Dollar Index, non-commercial traders maintain a net-long position of approximately 13,173 contracts. The broader positioning comparison therefore remains moderately supportive of the US dollar.
Seasonality
Seasonality is the main factor discouraging me from selling EUR/USD immediately.
July has historically generated positive average returns across every period included in the data:
• 20-year average: +0.25%
• 15-year average: +0.70%
• 10-year average: +0.23%
• 5-year average: +1.43%
• 2-year average: +2.87%
The seasonal curves also point towards additional strength during the final part of July.
This conflicts with the broader bearish technical structure and the retail positioning. However, rather than invalidating the bearish scenario, it could support an initial rally into resistance before the broader downtrend resumes.
The scenario I am currently monitoring is:
1. EUR/USD holds the 1.1360–1.1380 demand zone.
2. Price recovers towards 1.1465–1.1495.
3. The rally potentially extends into 1.1540–1.1555.
4. Bearish confirmation develops on H1 or H4.
5. Price returns towards 1.1380 and 1.1330.
6. A confirmed breakdown opens the way towards 1.1260–1.1280.
Invalidation
A daily close above 1.1555 would weaken my bearish thesis.
A confirmed breakout and acceptance above 1.1620 would invalidate the current scenario more decisively, opening the way towards 1.1675–1.1690.
Following the strong decline from the April highs, the pair is currently consolidating and developing a corrective structure between approximately 1.1360 and 1.1490.
At the current price of around 1.1410, however, I am not interested in looking for immediate short positions. EUR/USD is still trading inside a relevant demand zone between 1.1360 and 1.1425, making the risk-to-reward profile of selling at current levels relatively unattractive.
In my view, the recovery from the June lows still represents a correction against the broader bearish trend rather than the beginning of a confirmed bullish reversal.
For this reason, I am considering the possibility of one final move higher before bearish momentum returns.
Technical structure
The first upside objective is located at 1.1482, where liquidity is resting above the recent short-term highs.
If buyers manage to extend the recovery, the most relevant area is between 1.1540 and 1.1555. This zone combines the upper boundary of the corrective bullish structure with the main descending trendline.
This is where I would start looking for bearish confirmation on the H1 or H4 timeframe. I have no interest in anticipating an entry without first seeing a clear reaction and a shift in the lower-timeframe structure.
Retail sentiment
Retail sentiment currently shows that 63% of traders are long EUR/USD, while only 37% are positioned short.
The average entry price of long positions is approximately 1.1533, meaning that a significant proportion of retail buyers are currently holding losing positions.
COT positioning
The COT report dated July 14 shows the following non-commercial positioning on the euro:
• Long positions: 230,307
• Short positions: 242,912
• Net position: –12,605 contracts
Speculative positioning therefore remains slightly bearish on the euro.
This suggests that institutional sentiment towards the euro has marginally improved. It could help support a short-term corrective rally, but it is not yet strong enough to confirm a broader bullish reversal.
On the US Dollar Index, non-commercial traders maintain a net-long position of approximately 13,173 contracts. The broader positioning comparison therefore remains moderately supportive of the US dollar.
Seasonality
Seasonality is the main factor discouraging me from selling EUR/USD immediately.
July has historically generated positive average returns across every period included in the data:
• 20-year average: +0.25%
• 15-year average: +0.70%
• 10-year average: +0.23%
• 5-year average: +1.43%
• 2-year average: +2.87%
The seasonal curves also point towards additional strength during the final part of July.
This conflicts with the broader bearish technical structure and the retail positioning. However, rather than invalidating the bearish scenario, it could support an initial rally into resistance before the broader downtrend resumes.
The scenario I am currently monitoring is:
1. EUR/USD holds the 1.1360–1.1380 demand zone.
2. Price recovers towards 1.1465–1.1495.
3. The rally potentially extends into 1.1540–1.1555.
4. Bearish confirmation develops on H1 or H4.
5. Price returns towards 1.1380 and 1.1330.
6. A confirmed breakdown opens the way towards 1.1260–1.1280.
Invalidation
A daily close above 1.1555 would weaken my bearish thesis.
A confirmed breakout and acceptance above 1.1620 would invalidate the current scenario more decisively, opening the way towards 1.1675–1.1690.
📈 Nicola | EdgeTradingJourney
Documenting my path to $1M in prop capital through real trading, discipline, and analysis.
Documenting my path to $1M in prop capital through real trading, discipline, and analysis.
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Информация и публикации не предназначены для предоставления и не являются финансовыми, инвестиционными, торговыми или другими видами советов или рекомендаций, предоставленных или одобренных TradingView. Подробнее читайте в Условиях использования.
📈 Nicola | EdgeTradingJourney
Documenting my path to $1M in prop capital through real trading, discipline, and analysis.
Documenting my path to $1M in prop capital through real trading, discipline, and analysis.
Отказ от ответственности
Информация и публикации не предназначены для предоставления и не являются финансовыми, инвестиционными, торговыми или другими видами советов или рекомендаций, предоставленных или одобренных TradingView. Подробнее читайте в Условиях использования.